China's fiscal revenue soars 25% to record in 2011
By Richard Fu |
January 21, 2012, Saturday
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Print Edition
Print Edition
China's fiscal revenue rose to a record last year, exceeding the 10 trillion yuan (US$1.58 trillion) level for the first time, but the expansion actually slowed in the fourth quarter as growth in the economy and corporate earnings moderated.
Fiscal revenue jumped 24.8 percent to 10.37 trillion yuan last year, outpacing a 21.3 percent increase in 2010, the Ministry of Finance said yesterday. However, it rose only 10 percent in the fourth quarter after surging 33.1 percent in the first quarter and 29.6 percent in the second.
The ministry attributed the slowdown to a slowing economic growth, a change in individual income tax rate, lower consumer prices and falling auto and property sales.
Individual income tax receipts jumped 25.2 percent to 605.4 billion yuan last year. They dropped 5.5 percent year on year in the fourth quarter after China raised individual income tax threshold on September 1. That resulted in total savings of 55 billion yuan for individuals in the last four months of 2011, the ministry said.
"There is considerable scope to support domestic demand by boosting income growth, and by reducing the tax burden for both companies and individuals," Jing Ulrich, chairman of China equities at JPMorgan, wrote in a note earlier this week.
Last year, China's fiscal expenditure grew 21.2 percent to 10.89 trillion yuan, giving a fiscal deficit of 519 billion yuan, or 1.1 percent of the gross domestic product.
The ministry in March set an annual deficit target of 900 billion yuan.
Fiscal revenue jumped 24.8 percent to 10.37 trillion yuan last year, outpacing a 21.3 percent increase in 2010, the Ministry of Finance said yesterday. However, it rose only 10 percent in the fourth quarter after surging 33.1 percent in the first quarter and 29.6 percent in the second.
The ministry attributed the slowdown to a slowing economic growth, a change in individual income tax rate, lower consumer prices and falling auto and property sales.
Individual income tax receipts jumped 25.2 percent to 605.4 billion yuan last year. They dropped 5.5 percent year on year in the fourth quarter after China raised individual income tax threshold on September 1. That resulted in total savings of 55 billion yuan for individuals in the last four months of 2011, the ministry said.
"There is considerable scope to support domestic demand by boosting income growth, and by reducing the tax burden for both companies and individuals," Jing Ulrich, chairman of China equities at JPMorgan, wrote in a note earlier this week.
Last year, China's fiscal expenditure grew 21.2 percent to 10.89 trillion yuan, giving a fiscal deficit of 519 billion yuan, or 1.1 percent of the gross domestic product.
The ministry in March set an annual deficit target of 900 billion yuan.
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